Correlation Between Amazon and Garcia Reguera
Can any of the company-specific risk be diversified away by investing in both Amazon and Garcia Reguera at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Amazon and Garcia Reguera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Garcia Reguera SA, you can compare the effects of market volatilities on Amazon and Garcia Reguera and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Amazon with a short position of Garcia Reguera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Garcia Reguera.
Diversification Opportunities for Amazon and Garcia Reguera
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amazon and Garcia is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Garcia Reguera SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garcia Reguera SA and Amazon is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Amazon Inc are associated (or correlated) with Garcia Reguera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garcia Reguera SA has no effect on the direction of Amazon i.e., Amazon and Garcia Reguera go up and down completely randomly.
Pair Corralation between Amazon and Garcia Reguera
Given the investment horizon of 90 days Amazon Inc is expected to generate 1.31 times more return on investment than Garcia Reguera. However, Amazon is 1.31 times more volatile than Garcia Reguera SA. It trades about 0.22 of its potential returns per unit of risk. Garcia Reguera SA is currently generating about -0.06 per unit of risk. If you would invest 20,684 in Amazon Inc on September 12, 2024 and sell it today you would earn a total of 1,820 from holding Amazon Inc or generate 8.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon Inc vs. Garcia Reguera SA
Performance |
| Timeline |
| Amazon Inc |
| Garcia Reguera SA |
Amazon and Garcia Reguera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Garcia Reguera
The main advantage of trading using opposite Amazon and Garcia Reguera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Garcia Reguera can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Garcia Reguera will offset losses from the drop in Garcia Reguera's long position.The idea behind Amazon Inc and Garcia Reguera SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Garcia Reguera vs. Harmony Gold Mining | Garcia Reguera vs. Compania de Transporte | Garcia Reguera vs. Transportadora de Gas | Garcia Reguera vs. Agrometal SAI |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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